Correlation Between GCM Grosvenor and Mind MedicineInc

Can any of the company-specific risk be diversified away by investing in both GCM Grosvenor and Mind MedicineInc at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining GCM Grosvenor and Mind MedicineInc into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GCM Grosvenor and Mind MedicineInc, you can compare the effects of market volatilities on GCM Grosvenor and Mind MedicineInc and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in GCM Grosvenor with a short position of Mind MedicineInc. Check out your portfolio center. Please also check ongoing floating volatility patterns of GCM Grosvenor and Mind MedicineInc.

Diversification Opportunities for GCM Grosvenor and Mind MedicineInc

0.33

Correlation Coefficient

GCM Grosvenor  Mind MedicineInc

Weak diversification

The 3 months correlation between GCM and Mind is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding GCM Grosvenor and Mind MedicineInc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mind MedicineInc and GCM Grosvenor is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on GCM Grosvenor are associated (or correlated) with Mind MedicineInc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mind MedicineInc has no effect on the direction of GCM Grosvenor i.e., GCM Grosvenor and Mind MedicineInc go up and down completely randomly.

Pair Corralation between GCM Grosvenor and Mind MedicineInc

Given the investment horizon of 90 days GCM Grosvenor is expected to generate 3.01 times less return on investment than Mind MedicineInc. But when comparing it to its historical volatility, GCM Grosvenor is 6.33 times less risky than Mind MedicineInc. It trades about 0.21 of its potential returns per unit of risk. Mind MedicineInc is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  624.00  in Mind MedicineInc on March 4, 2024 and sell it today you would earn a total of  256.00  from holding Mind MedicineInc or generate 41.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

GCM Grosvenor  vs.  Mind MedicineInc

GCM Grosvenor

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in GCM Grosvenor are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent primary indicators, GCM Grosvenor reported solid returns over the last few months and may actually be approaching a breakup point.

Mind MedicineInc

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mind MedicineInc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating primary indicators, Mind MedicineInc exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GCM Grosvenor and Mind MedicineInc

The main advantage of trading using opposite GCM Grosvenor and Mind MedicineInc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GCM Grosvenor position performs unexpectedly, Mind MedicineInc can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Mind MedicineInc will offset losses from the drop in Mind MedicineInc's long position.

The idea behind GCM Grosvenor and Mind MedicineInc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..